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108 Cards in this Set
- Front
- Back
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Intent
At time of execution, testator must satisfy four elements to have capacity |
1 18+ yrs
2 Understands extent of her property 3 Knows the recipient: -spouse or domestic partner -issue -parents -those whose interests affected by the will 4 Must know the nature of her act of executing a will (but NOT legal technicalities) |
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Intent
Consequence of no capacity; exception |
Entire will NOT valid, so property passes by intestate succession
EXCEPTION: If testator had prior valid will that was purportedly revoked by a later will (made w/o capacity), first will is probated b/c later will couldn't have revoked w/o capaa |
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Intent
Typical capacity fact patterns |
Testator has conservator appointed
Testator has mental disorder diagnosis ALWAYS GO THROUGH 4 PT CAPACITY TEST |
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Intent
What is the insane delusion rule? Four elements and consequence as to will's validity |
Wills can be attacked IF AT TIME OF EXECUTION, testator suffered from insane delusion
1 Testator had false belief 2 False belief produce of sick mind 3 NO evid to support belief; NONE! 4 Delusion affected testator's will Consequence is that ONLY that pt of will affected is invalid; that pt goes to residuary devisee or, if none, intestate succession |
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Intent
Definition of residuary gift |
That part of will not otw expressly disposed of; often goes to residuary devisee
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Intent
Five elements of fraud |
1 Representation
2 Material fact 3 Known to be false by wrongdoer 4 Purpose of inducing action/inaction AND 5 In fact induces action/inaction desired |
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Intent
Three types of fraud |
1 Fraud in execution
2 Fraud in inducement 3 Fraud in provoking T from revoking |
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Intent
Fraud in execution definition; consequence |
EITHER someone forges T's signature to a will
OR T is given a doc to sign, purportedly power of atty but in fact is a will and T signs Entire will NOT valid; property passes by intestate succession unless prior valid will |
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Intent
Fraud in inducement definition; consequences |
Definition: Wrongdoer's representations affect contents of T's will
Consequence: ONLY affected pt of will is invalid So: 1 Give property to residuary devisees, if any 2 IF no residue, intestate succession OR 3 Constructive trust remedy |
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Intent
Fraud in preventing T from revoking definition; consequences |
Definition: Like fraud in the inducement
Consequences: NO probating of the will; instead, immediate intestacy + constructive trust |
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Intent
What is undue influence? What are the 3 ways to establish it? |
T's free agency is subjugated
1 Prima facie case 2 Presumption 3 Statutory undue influence |
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Intent
Elements for the type of undue influence called prima facie? Consequence? |
SOUP
1 Susceptibility: T's weakness in free will 2 Opportunity: wrongdoer had access to T 3 Unnatural result 4 Participation: wrongdoer's exertion of influence Consequence: ONLY affected pt of will is not valid; otw, residuary devisees, intestacy, and constructive trust |
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Intent
Elements for the type of undue influence called presumption? Consequences? |
1 Confidential relationship btw T and beneficiary-wrongdoer (anything from lawyer-client to two friends)
2 Beneficiary helped execute the will 3 Unnatural result Consequence: ONLY affected pt of will is not valid; otw ,residuary devisees, intestacy, and constructive trust |
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Intent
Rule of the type of undue influence called statutory undue influence? When does rule not apply? Consequences? |
CA law generally invalidates a donative transfer from transferor to person who:
--Drafted the instrument --Is related to drafter by marriage or marriage-like situation --Care custodian OR --Is in fiduciary relationship w/T AND who transcribes testamentary instrument Rule does NOT apply IF: --Transferor is related to, married to drafter --Instrument reviewed by independent atty who counsels transferor OR --Ct determines no wrongdoing by "clear and convincing" evid Consequences: Transferee does not take gift to the extent that gift exceeds that person's intestate share; rest to residuary devisees and intestacy -- |
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Mistake
Definition of mistake in content Relief given depending on type of mistake |
Wrong beneficiary named OR wrong gift is made
Relief --IF omission, NO remedy (cts don't rewrite wills) --IF addition, remedy may be given (usually striking addition) |
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Mistake
Definition of mistake in execution? Relief given depending on type of mistake |
T signs wrong doc
Relief --IF T mistakenly signs will believing it is non-testamentary, will is NOT probated b/c intent missing --IF there are reciprocal/mutual wills w/switched signatures, reformation in equity |
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Mistake
What are the kinds of mistake? |
Mistake IN:
1 Content 2 Execution 3 Inducement 4 Description 5 Validity of subsequent testamentary instrument (dependent relative revocation) 5 Living kids (pretermission) |
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Mistake
Definition of mistake in description (ambiguity) Consequences depending on type of ambiguity |
No one or nothing fits description
OR Two+ persons or things fit description Consequences --IF latent, introduce parol evid --IF patent, introduce parol evid (at common law, would have been invalid) |
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Mistake
Mistake in validity of subsequent testamentary instrument (or, DRR, dependent relative revocation): what does DDR allow a ct to do? |
To ignore the revocation of first will on grounds that T revoked first b/c T mistakenly believed that later will effectuated his intent
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Mistake
What is the DDR rule? Consequences? |
1 T revokes will, or portion thereof
2 Mistaken belief that SUBSTANTIALLY IDENTICAL will effectuates her intent Consequences Revocation of first will is conditional, dependent on second effectuating T's intent; if no intent, first will is NOT revoked |
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Mistake
What is DDR rule as to destroyed wills? |
CA's lost will laws where lost will can be probated IF there is a witness (e.g. drafting atty)
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Mistake
What are the two rules (scenarios) for mistake involving kids, or pretermission? Consequence? |
Rule 1: Kid is pretermitted IF born/adopted AFTER all testamentary instruments are executed and not provided for in any testamentary instrument
Consequence: Pretermitted kid takes intestate share of estate Rule 2: Kid is NOT pretermitted IF born/adopted BEFORE all testamentary instruments are executed and not provided for in any testamentary instrument Consequence: Kid gets nothing UNLESS T made mistake in omission |
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Components of the will
Elements of integration, or what papers make up the will? Two ways to establish integration? |
For papers to be integrated:
1 Intent AND 2 Presence of papers at time of execution To establish, prove: --Physical connection among all pages OR --Logical connection (grammar) |
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Components of the will
What is incorporation by reference? Four elements? |
Non-integrated writing is given testamenary effect and becomes part of will
Elements: 1 Doc or writing 2 In existence at time of execution 3 Doc clearly identified in will AND 4 T intended to incorporate doc *One can incorporate an invalid doc |
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Components of the will
Definition of facts of independent significance? Question to ask to determine? |
Who a beneficiary is, or what gift is given, may be given meaning by facts of significance independent from T's will
Question: Would this fact have existed even w/o the will? |
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Components of the will
Elements for writing disposing of limited tangible personal property |
1 Writing must be referred to in will, dated, and signed by T
2 Writing must describe items and recipients w/reasonable certainty 3 Writing executed before/after will AND 4 Writing directs disposition of tangible personal property LESS THAN $5k/item, $25k/aggregate |
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Components of the will
What is a pour-over will? 3 ways to validate a pour-over provision? |
Where part/all of T's estate is devised to trustee of an inter-vivos trust to be administered acc to that trust; and the trust doc contains the important terms that are not in the will (b/c will merely references trust)
Validation via: --Incorporation by reference --Fact of independent significance OR --UTATA (uniform testamentary additions to trusts act) so long as there is valid trust in existence BEFORE will execution |
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Formalities of execution for attested wills
Five elements of attested will? Post-2009 twist? |
Same 5 has for traditional formalities
1 In writing 2 Signed by one of the following 3 people: T, 3rd person in T's presence and at T's direction, conservator 3 Signing in presence of 2 witness--BOTH present SIMULTANEOUSLY 4 Witnesses must sign will during T's lifetime 5 Witnesses understand the instrument to be T's will Post-2009 twist: In CA, can avoid all witness elements IF can prove T's intent by "clear and convincing" evid |
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Formalities of execution for attested wills
What is an interested witness? Consequence and presumptions? |
Interested witness is a witness who is a devisee under the will
Consequence: Will is STILL valid BUT there is a presumption that there is wrongdoing (CA modern law) Interested witness can rebut presumption, but if can't, witness-beneficiary takes an amount that does NOT exceed intestacy amount Presumption does NOT apply if witness-beneficiary is taking in FIDUCIARY capacity (e.g. trustee) |
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Formalities of execution for attested wills
What is a conditional will? How probated? |
One which validity is made conditional by its own terms
Probated ONLY IF condition met |
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Formalities of execution for holographic (handwritten) wills
What are the two elements for valid holograph? |
1 Signed by T
2 Material provisions made in T's handwriting (e.g. beneficiary names, gifts) |
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Formalities of execution for holographic (handwritten) wills
Must stmt of testamentary intent be on face of holographic will? Three issues w/testamentary intent |
NO
Issues --T merely lists names of people and next to each name, assets T owns. Will? Intro extrinsic evid --Series of letters written by T qua integration? Intro extrinsic evid --What if testamentary intent is already there in a commercial form will? Fine. |
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Formalities of execution for holographic (handwritten) wills
Is a date needed? Issues? |
NO
BUT, lack of date can be problem w/: --Inconsistent wills: undated holograph that is inconsistent w/another will is NOT valid to extent of inconsistency w/o proof of later dating --Capacity: T could have not had capacity during period when undated holograph was executed |
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Codicils
What is a codicil? |
Testamentary instrument executed in compliance w/CA probate code that MODIFIES, AMENDS OR REVOKES WILL
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Codicils
What is republication? |
Codicil REPUBLISHES a will, so date of execution is moved to codicil execution
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Codicils
Republication problems w/re to pour-over/incorporation by reference, and pretermission |
Pour-over and incorporation by reference: watch for instances when the referenced writing in a will is changed after execution; need codicil for this
Pretermission: kid born post-will is NOT omitted if codicil later republishes that will |
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Codicils
Rules for revoking codicils and wills w/codicils |
Will, then codicil, then T revokes codicil: Will stands, codicil goes
Will, then codicil, then T revokes will: Will goes, codicil goes |
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Revocation by physical act
3 elements for revocation by physical act |
1 Destruction of will (can strike out too)
2 T must have simultaneous intent to revoke along w/act of destruction 3 T must do act, or someone in T's presence or at T's direction |
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Revocation by physical act
What is a cancellation? Interlineation? |
Cancellation is crossing out
Interlineation is writing in btw lines |
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Revocation by physical act
What does cancellation of one co-beneficiary do? What can save a will from interlineation? |
Uncancelled co-beneficiary takes whatever share he would have taken under uncancelled will; rest goes to residue, intestacy
DDR will preserve initial, uninterlineated will IF interlineated gift is worth more than original gift |
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Revocation by physical act
What are duplicate wills? What is the rule? |
Duplicate ORIGINAL wills; NOT copies
If T, or someone in T's presence or at T's direction, revokes one, BOTH are revoked |
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Revocation by physical act
What if one finds will in mutilated condition? |
If found mutilated at T's death, rebuttable presumption is that T revoked will
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Revocation by subseq written instrument
How many ways can Will1 be revoked by Will2? |
Two ways
Express AND implied |
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Revocation by subseq written instrument
What is implied revocation? |
Where Will2 totally disposes of T's estate, and nothing left for Will1
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Revocation by subseq written instrument
Revival If T makes Will1, then Will2, can T revoke Will2 and retain Will 1? If so, how? |
In CA
IF physical act: NO UNLESS T manifests intent to revive IF by subseq instrument like revoking Will2 w/codicil, NO UNLESS T manifests revival in codicil |
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Revocation by operation of law
What happens when there is an omitted child? Does he get anything from T? Exceptions? |
YES, takes what he would have taken from T under intestacy + any assets held in inter vivos trust
This means that other gifts will be reduced and abated; therefore, revocation Exceptions: --T's intent that future kids not take --T has kid at time of execution, and gives nearly everything by will/trust to parent of omitted child --Decedent provided for omitted kid some other way |
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Revocation by operation of law
What happens to omitted spouse (spouse who marries decedent after execution of testamentary instruments)? Does she get anything from T? Exceptions? |
Spouse gets what she would have gotten had T died intestate
Exceptions: --T's intent --Spouse signed waiver (what is a waiver? 3 elements below) --Decedent provided for spouse in some other instrument Waiver requires: 1 In writing 2 Full disclosure 3 Independent counsel OR waiver was fair CanNOT be unconscionable |
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Revocation by operation of law
3 testamentary gift rules for final dissolution of marriage/partnership |
1 Revocation of devise IF annulment or divorce (MORE than legal separation)
2 Devise reinstated IF will is unchanged and T remarries former partner 3 Rules do NOT apply if will states otw |
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Revocation by change in property holdings (ademption)
4 kinds of gift |
Specific devise: unique, T's intent is all that's needed
General devise: nothing unique, executor can give the gift OR its fair value Demonstrative devise: general-specific hybrid where gift is from a particular fund, but executor can substitute w/general property Residuary devise: everything not disposed of in will |
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Revocation by change in property holdings (ademption)
3 reasons to classify gifts |
Problems with:
1 Ademption by extinction (arises when testator does not have possession at death) 2 Ademption by satisfaction OR 3 Abatement problems |
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Revocation by change in property holdings (ademption)
What is ademption by extinction? In CA, what kinds of gifts avoid ademption by extinction problems? |
When specific gift fails b/c T did not own property at time of T's death, saved by T's intent for gift NOT to fail
In CA, following replaces intent for gift not to fail: Securities Conservator sells off assets Eminent domain |
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Revocation by change in property holdings (ademption)
What is ademption by satisfaction? 4 ways to establish satisfaction |
T gives beneficiary inter vivos down-payment on devise (so devisee only takes the balance after deducting what he already got)
1 Will provides for deduction 2 T declares satisfaction in contemporaneous writing 3 Devisee acknowledges satisfaction in writing at any time OR 4 Property given in satisfaction is same property that is subject of specific gift to devisee |
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Revocation by change in property holdings (ademption)
What is an advancement? What is major distinction btw advancement and satisfaction? |
Inter vivos down payment made by an intestate to an heir apparent
In satisfaction, where devisee predeceases T, devisee's heir must accept deduction In advanement, heir-apparent's heir does NOT have to accept deduction |
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Ks to make a will or devise, or to not make a will or devise
5 ways for a K to NOT revoke or to make a will |
1 Will or other instrument state material provisions of the K
2 Express reference in will or other instrument to K 3 Writing signed by decedent evidencing a K 4 Clear and convining evid of agreement btw decedent and promisee enforeable in equity: ESTOPPEL OR 5 Clear convincing evid of agreement btw decedent and 3rd person for benefit of claimant; ESTOPPEL |
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Ks to make a will or devise, or to not make a will or devise
When does cause of action arise for these Ks? |
Death of decedent
OR Decedent behaved in a way that looked like fraud of promisee |
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Ks to make a will or devise, or to not make a will or devise
What is a joint will? What is a mutual will? What is a joint and mutual will? Does creation raise a presumption of a K to not revoke or make a will? |
Will of 2 or more people on one doc
Separate wills of 2+ people which are reciprocal Reciprocal principles on one instrument NO presumption |
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Restrictions on testamentary dispositions
Four rules to protect the surviving spouse or domestic partner (acc to community property) |
Protection re CP: T can dispose of 1/2 of CP
Protection re QCP: T can dispose of only 1/2 QCP Widow's election: When T attempts to dispose of more than 1/2 CP/QCP, so widow chooses btw will or 1/2 CP Protection re illusory transfers of QCP and widow's election: Inter vivos transfer by decedent of QCP to 3rd person w/o consideration IS allowed UNLESS transfer is illusory (decedent retained control over QCP) |
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Restrictions on testamentary dispositions
Which killers cannot take any benefits under will or by intestacy? |
Felonious, intentional killers
BUT, killers retain 1/2 interest in property that was joint tenancy and severed by murder |
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Intestate succession
Under community property law, what does a surviving spouse take? |
CP: Their share of CP
QCP: Their share of QCP SP IF no issue: all SP IF one kid: 1/2 SP SP IF 2+ kids: 1/3 SP SP IF no issue but parent: 1/2 SP |
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Intestate succession
Intestate scheme in order |
--Issue
--Parents --Issue of parents --Grandparents --Issue of grandparents --Issue of pre-deceased spouse --Next of kin --Parents of pre-deceased spouse --Issue of parents of pre-deceased spouse --Escheat |
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Intestate succession
Whenever issue take by intestacy, they take acc to Probate Code s. 240 |
Issue of same degree take per capita, or equally in own rt
Issue of more remote degree take "per capita w/representation" ????????????????????????????? |
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Intestate succession
Rule for adopted kids; exception? |
Adopted kids ALWAYS treated as natural kid
Adoption severs relationship w/adopted child's natural parents EXCEPT: --Adoption is by pouse of natural parent OR --After death of either of natural parents |
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Intestate succession
When can stepkids or foster kids by considered as adoped? 3 elements |
1 Relationship began during child's minority
2 Continued through parties' lifetimes AND 3 Established by clear convincing evid that the step/foster parent would have adopted but for a legal barrier (e.g. no parental consent) |
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Distribution of the estate: Who can take?
What is a posthumous kid? How does he take? |
Kid conceived during lifetime of intestate or T, but born after death of intestate or T
Posthumous kid deemed heir of intestate, beneficiary of T's will |
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Distribution of the estate: Who can take?
What is foundational rule that implicates lapse/anti-lapse rules? |
For beneficiary to take a devise, beneficiary must survive T; dead people do not take
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Distribution of the estate: Who can take?
Rule of lapse |
If beneficiary predeceases T, beneficiary's gift lapses (fails) UNLESS will says otw
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Distribution of the estate: Who can take?
When does anti-lapse statute apply? 2 elements What is the rule? |
Applies ONLY IF devisee who predeceased T:
1 Was kin to T or to former spouse of T AND 2 Predeceased devisee left issue Rule is that issue steps into shoes of deceased devisee ALWAYS APPLY WHEREVER THERE IS PREDECEASING; ALSO, A CONDITIONAL WILL CAN REBUT |
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Distribution of the estate: Who can take?
To what instruments does the anti-lapse law apply? |
Wills AND revocable trusts
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Distribution of the estate: Who can take?
When does simultaneous death issue come up? What is rule? How does it work differently for intestacy and heirs? |
When no clear and convincing evid that one predeceased another, assuming predeceasing is important
Rule is that the person who needs survival does NOT get survival For intestacy and heirs, follow 120 hr rule where for an heir to take, heir must survive intestate by 120 hrs |
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Distribution of the estate: What does a beneficiary take?
What is after acquired property? What is the rule? |
After acquired property is property acquired after will was executed
Rule is that will passes ALL property T owned at death, including after acquired property |
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Distribution of the estate: What does a beneficiary take?
What about increase on investment during T's lifetime? Increase after T's death and during probate? |
Increases also pass IF owned by T at death
After T's death and during probate, devisee keeps the following increases: --Stock dividends --Stock splits --Rents --Cash dividends --Interest on indebtedness |
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Distribution of the estate: What does a beneficiary take?
Increases also pass IF owned by T at death Do general devisees get the increases too? |
NO, EXCEPT general pecuniary gifts
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Distribution of the estate: What does a beneficiary take?
Increases also pass IF owned by T at death When does abatement of gifts arise? |
--When necessary to pay for share of omitted child or spouse
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Distribution of the estate: What does a beneficiary take?
What is exoneration? What is CA view? |
Debt is extinguished
CA view is that there is NO automatic exoneration; devisee may take specific gift subject to encumbrance UNLESS T's will says otw |
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Will substitutes
What is a gift causa mortis? What are the two elements? What could destroy the gift? |
Gift made in contemplation of imminent death
Elements: 1 PERSONAL property ONLY 2 Donor makes delivery to donee Destroyed IF donor survives the peril |
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Will substitutes
What 3 ways to deliver property for gift cause mortis? |
Actual
OR Symbolic (note repping the gift) OR Constructive |
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Trusts
Definition of private express trust (PET) |
Fiduciary relationship with respect to property whereby one person, the TRUSTEE, holds legal title for the benefit of another, the BENEFICIARY, and which arises out of a manifestation of intent to create it for a legal purpose
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Trusts
What kind of property is covered by PET? What kind not? |
Covered: Presently existing transferable property interest
NOT covered: Illusory interests like future profits or a debt |
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Trusts
What can/cannot be the beneficiary of a PET? |
Any ascertainable person/group; but NOT huge groups
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Trusts
What happens to trust if there is no trustee? |
Trust does NOT fail
Ct appoints trustee In meantime, settlor retains legal title |
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Trusts
How to manifest trust intent? |
ONLY present manifestations
Precatory words (wish, hope) NOT enough |
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Trusts
Which trusts must be in writing? |
Real property; SOF issue
Personal, NO need for writing |
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Trusts
When can trust take effect? 2 choices, and what is extra requirement for one |
At settlor's death
OR During settlor's lifetime, MUST have DELIVERY |
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Trusts
Illegal purpose: at creation vs after creation |
At creation, ct should:
--Excise bad part --Invalidate trust, return asset to settlor --Punish settlor, give trust to trustee After creation: Resulting trust, and resulting trustee must transfer property back to settlor |
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Trusts
Elements of PET |
1 Manifestation of trust intent
2 Presently existing interest in transferable property AND 3 Identify beneficiary (unless charitable trust) |
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Trusts
To what kind of trust does RAP not apply? |
Charitable trust
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Trusts
What is cy pres? |
IF charitable trust with settlor general charitable intent for problem with execution, court can modify it to effectuate settor intent
NOT possible for specific intent |
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Trusts
What is honorary trust? |
Trust that has NO ascertainable beneficiary and confers NO substantial benefit to society
So, in btw PET and charitable trust |
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Trusts
What is totten trust? |
Simply intent to leave what's left in bank acct to beneficiary; really a will
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Trusts
What is voluntary alienation? Allowed? |
Allowed.
When beneficiary transfers his interest in trust to, say, bank for money now |
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Trusts
What is involuntary alienation? |
When creditor, e.g., attaches trust to get payment from beneficiary
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Trusts
What is spendthrift trust? Creditor exception |
Where there is NO in/voluntary alienation.
Beneficiaries canNOT transfer interest Creditors canNOT attach trust UNLESS preferred creditors like gov't, child support kids, spousal support spouse, alimony spouse, etc. |
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Trusts
What is a support trust? Can there be in/voluntary alienation? |
Trustee required to use ONLY so much income/principal as is necessary for beneficiary's health, support, maintenance, education
** NO voluntary alienation Generally NO involuntary alienation EXCEPT preferred creditors |
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Trusts
What is discretionary trust? Can there be in/voluntary alienation? |
Trustee given sole and absolute discretion to determine how much to pay beneficiary, if ever, and when to pay, if ever
** NO voluntary alienation OR involuntary alienation, UNLESS trustee decides to pay, then it must pay |
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Trusts
What is a resulting trust? When does it arise? |
Implied in fact trust based on presumed intent of parties
** Arises when: 1 PET ends and no provision for what to do with corpus 2 PET fails b/c no beneficiary 3 Charitable trust ends and no cy pres 4 PET fails b/c illegal after creation 5 Excess corpus than that required by PET 6 Purchase money resulting trust (A pay consideration to B to have title transferred to C, presumption that C is trustee for benefit of A) OR 7 Semi-secret trust (will makes a gift to person to hold as trustee, but no beneficiary) |
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Trusts
What is a secret trust? |
Will on its face makes gift outright to A, but gift is given on basis of oral promise by A to use the property for benefit of B
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Trusts
Difference in remedies btw semi-secret trust and secret trust? |
Semi-secret trust: resulting trust
Secret trust: constructive trust |
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Trusts
What is oral real estate trust? What is SOF issue? |
S orally conveys real property to A to hold for benefit of B, but deed only communicates a fee simple transfer.
A will try to keep property by raising SOF, but A will NOT be allowed to invoke SOF IF: 1 Fiduciary relationship btw S and A 2 Fraud in inducement on A's part OR 3 Detrimental reliance by B |
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Trusts
What are trustee's powers? |
Enumerated
AND Implied |
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Trusts
What does trustee owe to beneficiary? Acronym |
DENIALS
Duties: Due care Earmark Not to delegate Invest Account Loyalty Segregate THOSE SUFFERING BREACH CAN SUE FOR RECOVERY |
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Trusts
What are three tests for duty to invest? What duty is always implied in it? |
--State lists where good investments are gov't bonds, fed insured CODs, etc.
--Common law reasonably prudent test --Uniform Prudent Investor Act Distinction: Under UPIA, each individual investment is NOT scrutinized, rather entire portfolio is ALWAYS duty to diversify investments |
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Trusts
What are liabilities of trustee to third persons? Common law vs modern rules |
Liability in K: Trustee can be sued either in personal capacity (his assets vulnerable) or in representative capacity (only trust assets vulnerable)
Common law: Trustee sued in personal capacity, w/rt to indemnification from trust assets UNLESS expressly states rep capacity Modern: Presumption of rep capacity ** Liability in tort Trustee personally liable ONLY IF trustee is personally at fault |
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Trusts
When can settlor modify trust? When can ct? |
Settlor: IF settlor expressly reserves power to modify
Ct: Two types 1 Cy pres for charitable trusts 2 Deviation power to change provisions IF --Unforeseen circumstances AND --Necessity |
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Trusts
When does settlor have power to revoke revocable trust? |
Majority rule: Settlor MUST reserve power
Minority rule: Power to revoke UNLESS trust is expressly irrevocable |
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Trusts
Three ways to terminate irrevocable trusts |
--Settlor and beneficiaries all agree
--All beneficiaries agree to terminate AND all material purposes accomplished OR --Operation of law: passive trusts AND Statute of Uses |
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Trusts
Life tenant gets what income? Life tenant's interest pays for what expenses? |
Cash dividends
Interest income AND Net business income ** --Interest on loan indebtedness --Taxes --Minor repairs |
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Trusts
Remainderman gets what income? His interest pays for what expenses? |
--Stock dividends
--Stock splits --Net proceeds on sale of trust asset ** --Principal on loan indebtedness --Major repairs/improvements |
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Trusts
Allocation of cash vs stock dividends Allocation of profit from sale THIS IS WHAT IS MEANT BY DUTY TO ACCOUNT |
Cash allocated to income
Stock allocated to trust principal Sale profits allocated to principal UPIA allows some adjustment power to trustee ALL ASSETS RECEIVED BY TRUSTEE MUST BE ALLOCATED TO TRUST PRINCIPAL OR TO INCOME |
